does not imply that value was created in the period. EVC is not a periodic measure of value creation, and it also does not provide information about the afterward realization of value. For a performance measures to indicate the necessity of corrective action, it needs to indicate the extent to which the initially planned value creation has actually been realized.
In the next section, we describe the design of a performance measurement system that links goodwill accounting and the desirable properties described above. In section 4, we critically discuss the use of accounting information gathered for impairment testing according to IAS 36 and FAS 142 for this performance measurement system.
3. Performance-based evaluation of Goodwill本文来自优,文,论-文·网原文请找腾讯752018766
In the following, we present a measure which shows both the newly created value and the extent to which the initially planned value creation has been realized. We show that this performance measure has two main components: residual income and goodwill. Since all figures are calculated on the level of reporting units or cash generating units, the resulting performance measure can additionally be used for performance evaluation purposes of divisional managers. We apply our measure to a numerical example in order to demonstrate its properties.
3.1. Residual Income, Goodwill and Value Creation农村家庭邻里纠纷的调查报告 -
As a starting point, we take on the perspective of shareholders. From their perspective, the outcome of the firm consists of increases in the share price, dividends, options etc., i.e. the so-called “total return to shareholders (TRS)”:
where St denotes the stock price at date t. In case of distributing the profits, dividends can be approximated by free cash flows (FCF), which is operating cash flows less investments. The shareholder receives the FCF and has to accept a decrease in firm value. If earnings are retained he does not receive dividends but an increase in firm value. Thus, both cases can be expressed by the TRS, i.e. the sum of the dividends (D) and the change in
stock price (ΔS).
6Consistent with O'Hanlon and Peasnell (2002), we assume that cash flows occur at discrete intervals at the end of each period. For simplicity, we abstract from debt financing [4]. Further, we assume the “clean-surplus-relation” to hold [5]. That is, all changes in book values during a period are reflected in that period’s accounting income or in the period’s net distribution to shareholders:where Bt denotes the book value of equity at date t. It is the accounting income and Dt denotes the net distribution to shareholders at date t. Residual income as a measure of accounting income in excess of a required return on capital employed is central to this discussion. As a consequence, it only answers the question whether profits exceed the 近代英语的简洁简化
firm's cost of capital r. It is therefore given by:
The costs of capital are equal to the alternative investment-opportunities of the owners. Thus, it is irrelevant to the investor if the surpluses are actually distributed and reinvested by him or if the firm retains and invests the surpluses. Consequently, if a value based performance measure is to provide information about the additional value created from the perspective of shareholders, it needs to capture both the increase in firm value and the distributions to shareholders.
TRS as a performance measure is typically used for the external measurement of profitability of a share ownership, consisting of the gain in share price and the dividends. To make use of this measure internally, we need to replace external by internal measures, assuming that intrinsic valuation adequately represents the valuation on the capital market. The conversion of internally generated fundamental firm value into market value is influenced by additional effects. These effects, like capital market communication and information processing, require their own management. By comparing internal and external value generation, differences can be identified, which possibly result from a poor communication with the capital market. For internal control purposes, stock prices St are substituted by the intrinsic value Vt which is formally given by
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